Iran, Russia finalizing oil-for-power deal

Russian officials are in Tehran for final talks on a multibillion-dollar agreement which includes sales of Iranian oil to that country in exchange for electricity, a deputy energy minister has said.  

Negotiations are underway at the expert level for construction of new power plants and optimization of existing units under a memorandum of understanding signed last year, Deputy Energy Minister Houhang Falahatian said on Monday. 

Oil-for-electricity barter constitutes a big part of the $12 billion agreement under which Iran will import 500 megawatt-hours (mWh) of power from Russia, the news agency said.

Falahatian said negotiations are also held with Azerbaijan, Armenia and Georgia for synchronization of power grids in order to transfer Russian electricity from their territories.

Over recent weeks, several delegations of Russian experts have traveled to Tehran for technical talks about a series of joint power generation projects in order to prepare them for finalization, the deputy minister said. The projects also include building new thermal and coal-powered plants in Iran.

Iran and Russia have recently stepped up trade connections amid Western sanctions targeting both countries' economies. 

They have agreed on an arrangement under which Russia will sell 500,000 barrels of Iranian oil per day. Iran will use the money to buy goods such as steel, wheat and machinery from Russia and other Eurasian nations, namely Kazakhstan and Belarus. 

“We want to have long-term economic relations with the Russians. Our plan is to seriously expand economic and technical ties with Russia,” Minister of Petroleum Bijan Zangeneh said earlier this month.

“There is political will at the highest level in Iran to expand economic relations with Russia. I also think it is good to develop Iran’s economic ties with Russia, China, India and emerging economic states,” he said.

Meanwhile, Russia is buying dairy products, meat and fish from Iran after imposing its own sanctions on food imports from Europe, the US, Australia and Canada in retaliation.

Deputy Agriculture Minister Hassan Salehi said exports of 20,000 metric tons of marine products to Russia, including canned and frozen fish and shrimps, will begin from the Iranian month of Mordad which starts on July 23.

He said there is no limitation for exports and every Iranian producer can begin sales after receiving a license from the Russians.